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Here's Why Investors Must Hold XRX Stock in Their Portfolios Now
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Key Takeaways
Xerox shares surged 64% in six months, outpacing the industry and the S&P 500 Composite.
Xerox beat revenue and EPS estimates in the first two quarters of 2026 after a Q4'25 miss.
Xerox is expanding IDP and digital services while its current ratio improved to 1.18 in Q2.
Xerox Holdings Corporation (XRX - Free Report) shares have surged 63.9% in the past six months. Meanwhile, the industry and the Zacks S&P 500 Composite have returned 17.9% and 11.1%, respectively.
6-Month Share Price Performance
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 top line is pegged at $7.6 billion, suggesting 8.1% year-over-year growth. For EPS, the consensus mark is pinned at 17 cents, indicating a 128.3% jump.
Factors That Augur Well for XRX’s Success
Back-to-Back Beats Following Slump: Xerox’s top- and bottom-line results for the fourth quarter of 2025 missed the consensus estimate. However, a turnaround was evident as the company’s revenues and earnings per share (EPS) surpassed the consensus mark in the first and second quarters of 2026. A persistent beat following a major detriment signals recovery that appears highly appealing to investors, compelling them to consider adding this stock to their portfolios.
Image Source: Zacks Investment Research
Image Source: Zacks Investment Research
Intelligent Document Processing (IDP) Aids Customer Base Expansion: Xerox’s strategic focus on IDP leverages its document-management expertise to expand beyond hardware and strengthen its role in customer workflows.
Its Capture & Content Services offerings use AI, robotic process automation and machine learning to classify, extract and process data from physical and digital documents, helping customers automate work, reduce costs and support compliance. Management continues to prioritize expansion in digital services and broader wallet share across its existing customer base.
Solid Liquidity: Xerox’s current ratio improved to 1.18 in the second quarter of 2026 from the preceding quarter’s 1.11 due to a $161-million reduction in short-term debt and higher other current assets. Current assets of $3.70 billion exceeded current liabilities of $3.13 billion, bolstering its ability to address near-term obligations. Investors should find this highly appealing, as a current ratio of more than 1 signals effective short-term debt coverage.
Risks Faced by Xerox
Fierce Competition: Xerox operates in a competitive market, shaped by rapid technology change, pricing, reliability, quality, distribution and customer support. It competes with Canon, FUJIFILM Business Innovations and HP. As competition increases, it compels the company to make rapid investments that can easily create imbalances in growth and profitability.
Brand Perception Hinders IDP Pivot: Xerox’s legacy identity as a “copier company” can hinder its shift toward IDP, digital services and IT Solutions. The company is expanding its portfolio under a unified Xerox brand, but the transformation is not yet reflected in the reported results.
XRX’s Zacks Rank & Stocks to Consider
The company currently has a Zacks Rank of #3 (Hold).
View the Zacks #1 Rank List
Image: Bigstock
Here's Why Investors Must Hold XRX Stock in Their Portfolios Now
Key Takeaways
Xerox Holdings Corporation (XRX - Free Report) shares have surged 63.9% in the past six months. Meanwhile, the industry and the Zacks S&P 500 Composite have returned 17.9% and 11.1%, respectively.
6-Month Share Price Performance
The Zacks Consensus Estimate for 2026 top line is pegged at $7.6 billion, suggesting 8.1% year-over-year growth. For EPS, the consensus mark is pinned at 17 cents, indicating a 128.3% jump.
Factors That Augur Well for XRX’s Success
Back-to-Back Beats Following Slump: Xerox’s top- and bottom-line results for the fourth quarter of 2025 missed the consensus estimate. However, a turnaround was evident as the company’s revenues and earnings per share (EPS) surpassed the consensus mark in the first and second quarters of 2026. A persistent beat following a major detriment signals recovery that appears highly appealing to investors, compelling them to consider adding this stock to their portfolios.
Intelligent Document Processing (IDP) Aids Customer Base Expansion: Xerox’s strategic focus on IDP leverages its document-management expertise to expand beyond hardware and strengthen its role in customer workflows.
Its Capture & Content Services offerings use AI, robotic process automation and machine learning to classify, extract and process data from physical and digital documents, helping customers automate work, reduce costs and support compliance. Management continues to prioritize expansion in digital services and broader wallet share across its existing customer base.
Solid Liquidity: Xerox’s current ratio improved to 1.18 in the second quarter of 2026 from the preceding quarter’s 1.11 due to a $161-million reduction in short-term debt and higher other current assets. Current assets of $3.70 billion exceeded current liabilities of $3.13 billion, bolstering its ability to address near-term obligations. Investors should find this highly appealing, as a current ratio of more than 1 signals effective short-term debt coverage.
Risks Faced by Xerox
Fierce Competition: Xerox operates in a competitive market, shaped by rapid technology change, pricing, reliability, quality, distribution and customer support. It competes with Canon, FUJIFILM Business Innovations and HP. As competition increases, it compels the company to make rapid investments that can easily create imbalances in growth and profitability.
Brand Perception Hinders IDP Pivot: Xerox’s legacy identity as a “copier company” can hinder its shift toward IDP, digital services and IT Solutions. The company is expanding its portfolio under a unified Xerox brand, but the transformation is not yet reflected in the reported results.
XRX’s Zacks Rank & Stocks to Consider
The company currently has a Zacks Rank of #3 (Hold).
Some better-ranked stocks from the broader Zacks Industrial Products sector are Enersys (ENS - Free Report) and Alarm.com (ALRM - Free Report) , each currently sporting a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Enersys has a long-term earnings growth expectation of 15%. ENS delivered a trailing four-quarter earnings surprise of 22.4%, on average.
Alarm.com has a long-term earnings growth expectation of 12.8%. ALRM delivered a trailing four-quarter earnings surprise of 14.6%, on average.